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Economy
In reply to the discussion: STOCK MARKET WATCH -- Monday, 18 March 2013 [View all]xchrom
(108,903 posts)44. CYPRUS BAILOUT DEPOSIT TAX RATTLES MARKETS
http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-18-07-50-03
LONDON (AP) -- Stocks around the world and the euro fell sharply Monday as investors fretted over a plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation.
Although Cyprus accounts for only around 0.2 percent of the economic output of the 17 European Union countries that use the common euro, the tax on depositors was a significant policy shift that has stoked fears of bank runs in other troubled European economies. Cyprus residents already emptied virtually all ATMs on the island in a weekend bank run.
"If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job," said Michael Hewson, senior market analyst at CMC Markets.
Since the European debt crisis began in late 2009, savers have been spared. But the bailout of Cyprus, agreed to early Saturday, foresees a 6.75 percent levy on deposits below (EURO)100,000 ($130,860), rising to 9.9 percent on those above.
LONDON (AP) -- Stocks around the world and the euro fell sharply Monday as investors fretted over a plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation.
Although Cyprus accounts for only around 0.2 percent of the economic output of the 17 European Union countries that use the common euro, the tax on depositors was a significant policy shift that has stoked fears of bank runs in other troubled European economies. Cyprus residents already emptied virtually all ATMs on the island in a weekend bank run.
"If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job," said Michael Hewson, senior market analyst at CMC Markets.
Since the European debt crisis began in late 2009, savers have been spared. But the bailout of Cyprus, agreed to early Saturday, foresees a 6.75 percent levy on deposits below (EURO)100,000 ($130,860), rising to 9.9 percent on those above.
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